Edward T. Hanley, head of the 300,000-member
Hotel Employees and Restaurant Employees International Union,
which has been dogged by allegations of organized crime ties,
plans to retire July 31 under a settlement agreement.

The announcement comes 2 1/2 months after
federal monitoring of the union, designed to investigate and weed
out mob allegations, ended and after Hanley's attorney denied
that Hanley would be forced out this summer as part of a deal
that would allow him to avoid facing civil charges.

The politically connected Hanley said after
leaving an executive board meeting here Tuesday that he has ``entered
into a settlement agreement'' to retire.

But Hanley, who refused 35 times to answer
questions at a Senate subcommittee hearing on organized crime
in 1984, will continue to receive $250,000 a year for life from
the union--his current salary--as a pension. He also will continue
for at least a year as chairman of the union's multimillion-dollar
welfare and pension funds.

The union, which was founded in Chicago,
has said it expects the final report of Kurt Muellenberg--who
served as federal monitor--to ``conclude that the international
union and its general officers are not controlled or influenced
by organized crime.''

But Muellenberg, part of a new union-paid
public review board that includes former Illinois Gov. James Thompson,
declined to comment on what that final report will say. Muellenberg,
who is also former chief of the Justice Department's organized
crime and racketeering section, declined to comment on a Chicago
Sun-Times report in February in which sources said Hanley and
others were considering stepping down this summer as part of a
deal to avoid civil charges of abuse.

The Sun-Times report cited sources familiar
with the union investigation who said civil charges were
being prepared against Hanley that included allegations his international
ran a ``ghost'' local in Rhinelander, Wis., near which Hanley
and others have vacation homes.

The civil charges would also accuse him of
abusing a union jet and signing off on questionable auto-lease
deals that personally benefitted union bosses, the sources said.

In February, attorney Robert Rotatori of
Cleveland, who represented Hanley, denied any wrongdoing
by Hanley and denied that the monitor's office was trying to force
Hanley out in exchange for any deal. Rotatori said then that Hanley
would step down only ``if he decides to retire or if he gets hit
by a bus.''

The union's general executive board elected
John W. Wilhelm, the union's general secretary-treasurer, to succeed
Hanley effective Aug. 1.